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Federal Trade Commission and Free Trial Offers

By Internet Lawyer

The U.S. Federal Trade Commission (FTC) is working with Visa and the Better Business Bureau to make consumers aware of deceptive billing practices involving free trial offers. Many Internet marketers selling continuity programs (such as monthly newsletters or memberships) cross the line into unethical or illegal marketing practices that involve free or low cost trial offers. Typically the trial period lasts 14 to 30 days and the consumer is automatically billed after that time unless cancellation occurs.

Some marketers hide the free trial in the sales content with vague language or have the box for the free trial already pre-checked. They hope the Federal Trade Commission doesn’t find out what they’re doing.

In one particularly bad instance in 2009, I saw a marketer use multiple trial offers and hid the last one on the order page below where the credit card info was entered. Unless the client scrolled down and unchecked a box, the continuity trial period kicked in when the order for the main product was made. Another well-known marketer hid his continuity programs terms in the legalese on another page and didn’t even mention it in the sales letter. And of course, there are some unethical Internet marketers who make it impossible to cancel during the trial period because the contact information is wrong (nonexistent phone numbers, e-mails that bounce, etc.).

As the FTC cracks down on deceptive marketing practices based on its guidelines that went into effect on December 1, 2009, Internet marketers should understand that the World Wide Web is being tamed. There are plenty of legal ways to make money online without resorting to deceptive free trial offers such as hidden continuity programs. A good continuity program should be able to stand on its own merits. If you can’t sell a continuity program as an independent product because it lacks value, don’t try to trick clients into paying for it through the use of a free or low cost trial period that results in unwanted continuity billings. This can get you into big trouble with the Federal Trade Commission.

Related Reading: FTC, Visa, and BBB Partner to Educate Consumers About Free Trial Offers and Online Scams

Membership: How to Avoid Internet Credit Card Billing Traps

By Internet Lawyer

forced-continuityIf you get caught up in the buying frenzy of the pre-launch segment of a big info product marketing launch, you may buy an Internet info product without realizing that at the same time you’re committing yourself to monthly recurring charges on your credit card or debit card for a monthly membership. Sometimes the continuity or microcontinuity program is the main product being sold. However, it is common for the membership to be a cleverly disguised “bonus” for the main product or a one-time-offer (OTO) to try the membership for 7 to 30 days for free or at low-cost. Regardless of the particular terms, the goal is to capture your credit card information with the authorization to charge you monthly recurring charges beginning after X number of days.

To be clear, there’s absolutely nothing wrong with doing this if the Internet marketer (1) clearly discloses the continuity program’s price and terms,  (2) offers you something of value, and (3) makes it easy for you to cancel your subscription at any time. The good marketers do this. The sleazy marketers go out of their way to pump out trash using hidden or forced continuity and then make it impossible for you to cancel your membership as they continue to bill you.

What should you do? Research complaints about Internet marketers online before buying from them during a big launch. If there is a past history of fraudulent or deceptive billing practices, don’t buy from them. Ignore the occasional nutcase rant you’ll find from someone who is jealous of a particular marketer’s success. Instead, look for patterns of client service – good and bad – before determining whether you want to enter into a potentially long-term financial commitment involving thousands of dollars of your money.

You should be able to quickly identify those who operate scams misusing Jeff Walker’s product launch formula.

But what should you do if you’re still on the fence after doing your due diligence?

Example: You really want to buy “Village Idiot Facebook Riches” that’s about to be launched but it includes a continuity program. You’ve done your due diligence by researching the village idiot “guru” who is offering the program but the reviews are mixed as to whether the particular marketer provides true client service or bills deceptively.

Possible Solution: Get a pre-paid Visa or Mastercard gift debit card with just enough funds on it to make the initial purchase and perhaps a month of continuity billing. If you like what you see with the continuity/membership, you can either replenish the card with sufficient funds to cover monthly billing or provide the marketer with information for one of your regular credit or debit cards to cover ongoing payments. If you dislike the continuity, you’ve limited your exposure with the gift card. The dishonest Internet marketer who refuses to cancel your subscription shouldn’t be able to bill the gift card beyond the amount on it. In other words, you’ve taken control of the ability to cancel the continuity rather than begging for it to be done by someone who won’t honor their commitments to you as a client.

Hat tip: Tony Blake